How To Give A Gift Of Stock (For Kids And Family)

A large pile of wrapped gifts under a decorated Christmas tree. This scene illustrates the abundance of toys and material gifts typical of the holidays, highlighting the alternative value of gifting stocks or investments to build a child's future wealth rather than adding to household clutter. Source: The College Investor

Making a gift of stocks is a great way to help a child (or anyone) learn about the power of investing to build wealth. Plus, there are some really fun ways to give gifts – like a framed stock certificate.

When you ask a parent what their kids want for Christmas, they’ll likely start with a long sigh followed by, “Well…she really likes K-Pop Demon Hunters and Dress Up.”

If you press further, you’ll find that the parent is preoccupied with the toys the child has, and they’re actually not all that keen on giving their child more plastic waste.

Enter the gift of stocks and investments. Giving a share of stock to children is a great way to avoid parental stress, help prepare the child for their financial future, and teach some lessons along the way.

Plus, as a millennial family, I’m personally tired of receiving all this junk. Think about it. Your child may receive up to 20 gifts each holiday season (Mom, Dad, siblings, grandparents, Santa, etc.). But by mid-January, what they actually play with is limited to one or two games.

So, instead of wasting all that money on gifts (and then having a bunch of junk lying around the house), why not use the same money to invest in your child’s future. This is a great option for extended family who may want to give a gift.

If this is you, these are the best ways to give a share of stock to a child, gift investments, and even teach them financial literacy topics in a fun way!

🎁 How to present a framed certificate of participation

If you want to give a real share certificate to a child (who will also become an investor), check out GiveASHare. You can buy a framed share of stock (making it the perfect gift), and they become shareholders too. Check out GiveAShare here >>

Contribute to 529

In my opinion, the best way to give stocks to children is to contribute to their 529 or ABLE accounts. Many parents invest a few hundred or a few thousand dollars for their children’s future, and will appreciate every extra dollar that can be invested on their children’s behalf.

If you plan to give thousands of dollars to a special child, you can set up a 529 account yourself and name the child as a beneficiary, but for most people this is considered an excessive gift.

Here are the details of the best 529 plan in your state:

The most practical way to contribute to a 529 plan is to ask the parents if they have a plan. If they respond positively, you can ask them to invest your $20 or $50 gift on your behalf. This may seem like a small gift, but it adds up over time. I have two children, both of whom have 529 plans that we fund with cash they received as Christmas and birthday gifts. Their accounts contain several thousand dollars.

A great way to make a college gift through a 529 plan is to use a service like Supporter. Backer makes it easy to set up and contribute to a 529 plan! After you set it up, your child gets a unique URL – for example backer.com/childsname. Plus, you can get $10 for every new backer who joins!

You can share this URL with your family, and they can easily make a gift to a 529 plan! In our family, this is the #1 way Grandma and Grandpa give our kids money, and it really goes a long way! Check it here.

A close runner-up to Backer is Upromise. Upromise has been around for a long time and lets you link your 529 to a range of rewards programs, shopping discounts, and even a credit card. This is a great tool for grandparents to use to help save for their grandchildren’s college.

Another option is a college gift. You can purchase physical or electronic gift cards to give as a gift. Check out our college gift cards here >>

Related to: How grandparents can save money and give it to their grandchildren for college

Gift of a share of stock

If contributing to a 529 plan isn’t a realistic option (or your preferred option for whatever reason), consider giving an actual share of a child’s preferred stock (or ETF). There are a number of sites dedicated to exactly this option.

partner Allows you to purchase one share and receive the actual certificate (or replica certificate) in a frame as a gift. Your share is also registered electronically – so you are a real owner of the shares. Check out GiveAShare here >>

You can also simply give away shares through your regular brokerage firm. Maybe you already have an investment account at Fidelity, Charles Schwab, or Vanguard? If so, converting a gift of stock is very easy – especially if the child already has a UGMA account set up in the same company.

If they don’t, it’s very easy to set one up. If you want to take a look at all of your options, check out our list of the best custodial investment accounts opened for children.

If you do this, all you have to do is fill out the company’s “Transfer of Stock as a Gift” form. Here’s an example from Fidelity:

Fidelity Transfer Stock as a Gift | Source: Fidelity Investments

Transfer of shares as a gift form. Source: Fidelity Investments

Prepare a DRiP plan

Another way to buy a share of stock for a child is to purchase a Dividend Reinvestment Plan (DRiP) directly from the company.

To set up a DRiP, you have to buy a share of company stock, then opt in for the automatic reinvestment of dividends. Many kid-friendly companies like Hershey’s and Hasbro offer DRiP plans with no fees to shareholders.

Moreover, most of our products Favorite free places to invest, like Charles Schwab, offer the ability to reinvest dividends for free within your account.